First phase of gas plant finished

July 31, 2013

KENSINGTON - Thousands of hours of manual labor and millions of dollars have been invested in a plant just outside of Hanoverton, and it's only a matter of time before those efforts pay off.

Midstream M3 LLC announced Monday the first phase of Columbiana County's first natural gas processing plant is finished.

Over the weekend the $400 million plant began receiving the Utica shale gas from the neighboring wells, processing that gas and delivering the residue to interstate markets, according to a company press release.

The plant on a hill between state Route 644 and Tunnel Hill Road is also the first natural gas processing and fractionation project put into operation in Eastern Ohio, the company said.

It began taking shape in November of last year and serves as a collection and compression site for the natural gas from Utica shale wells being drilled in Eastern Ohio.

During the process the natural gas is gathered into a cryogenic facility on site that separates the natural gas liquids from the natural gas through a process that drops temperatures to below 150 degrees.

The natural gas liquids are to be transported across Carroll County via a new web of pipelines to a shale gas storage and transfer hub in Scio in Harrison County.

The facilities are part of a $900 million total project undertaken by M3 and its partners, Access Midstream and EV Energy Partners.

The company said the cryogenic facility is capable of processing 200-million-cubic feet of natural gas a day and the $500 million hub in Scio is on its way to completion.

The Kensington and Scio facilities are known as the Utica East Ohio System and include approximately 63 miles of natural gas and natural gas liquids gathering lines, according to the release.

"Completing the first stage of this project is an important milestone in advancing the development of the Utica shale formation in Ohio, as wells can begin producing both natural gas and natural gas liquids, with this processing system getting those products an important step closer to homes, businesses and industrial users," M3 President and CEO Frank Tsuru said.

He went on to say he is pleased the company was able to commission the first fully integrated fractionation project in Ohio and the facilities align with state environmental regulations.

Access Midstream CEO Mike Stice was quoted in the release as saying the "heroic accomplishment" was put into operation on time and on budget, and thanked M3 for providing the processing and fractionation.

Access Midstream provided the gathering and compression.

More than 1,700 people have worked to construct the Kensington and Harrison facilities over the last few months and M3 said about 50 people will be employed to operate those facilities upon their completion.

To date, more than 60 percent of workers hired are Ohio natives, M3 reported.

The release also stated an additional 15 jobs are expected to be created for the operation of the rail terminal at the Scio plant.

President and CEO of EV Energy Partners Mark Hauser said in a statement they are "thrilled" to be a part of the infrastructure development of the Utica play and believes the project will be a "huge boost" for area Utica shale producers that until now have been "significantly constrained" by the lack of the necessary infrastructure.

M3 said the second and third phases of the project are expected to be completed in December. After that, the UEO System will consist of 800-million- cubic-feet per day of cryogenic processing, 135,000 barrels per day of natural gas liquids fractionation and 870,000 barrels of natural gas liquids storage.

M3 is the facility manager of the plants and responsible for their construction and operation while Access Midstream is responsible for the construction and operation of all pipeline facilities upstream of the UEO plants, according to the release.